Black
Hills filed a lawsuit against MAC and Siouxland alleging
multiple causes of action, including breach of contract,
breach of good faith and fair dealing, and tortious
interference with a business relationship. Docket 46. MAC had
entered into a written distributor agreement with Black Hills
on September 26, 2012, granting Black Hills the right to
franchise and distribute MAC product throughout western South
Dakota and parts of Nebraska. Docket 67-6. A new contract
term would renew yearly on January 1, unless either party
modified or non-renewed the current agreement. Id.

On or
around June 3, 2013, MAC sent proposed distributor agreement
modifications to Black Hills' Vice President, Mike Rush.
Docket 67-10. On June 24, 2013, MAC sent Black Hills an email
stating that MAC would not accept any orders placed by Black
Hills until the new agreement was signed. Docket 67-11. On
July 2, 2013, Black Hills sent its own proposed modifications
to MAC, including the right to sell all MAC products
instead of the two trailer types (dumps and flatbeds)
authorized under the existing agreement. Docket 67-14 at 5
(emphasis added). This letter also stated Black Hills'
intention to file a civil lawsuit in South Dakota against MAC
if the new terms were not met. Id.

Black
Hills alleges that the June 24, 2013 email is a wrongful
termination of the distributor agreement, and that Black
Hills incurred damages it otherwise would not have but for
MAC's non-renewal of the agreement. Docket 100 at 2. It
is in dispute whether the agreement was terminated within the
first nine-months of contract, or non-renewed after fifteen
months on December 31, 2013. Id. Regardless, Black
Hills states it only sold MAC trailers for nine months.
Id. at 2 n.2. Black Hills retained Wayne R. Brown to
provide expert testimony on his assessment of Black
Hills' lost profits and provided MAC and Siouxland with
Brown's supplemental expert report. Docket 86-3. In
reaching his ultimate conclusion, Brown considered multiple
sources of data and information, and included that which he
assessed to be relevant. Docket 100 at 2.

LEGAL
STANDARD

The
admissibility of expert testimony is governed by Federal Rule
of Evidence 702, which requires expert testimony to be
“scientific, technical, or other specialized
knowledge” that will clarify the trier of fact's
understanding of the evidence or determination of a fact in
issue. See, e.g., Tamara Star Comes Out v.
Ahsan, No. Civ. 05-5075, 2008 WL 2675106, at *2 (D.S.D.
Apr. 22, 2008). Under Rule 702, an expert may testify if (in
relevant part): “the testimony is based on sufficient
facts or data[, ] . . . the product of reliable principles
and methods[, ]” and if “the expert has reliably
applied the principles and methods to the facts of the
case.” Fed.R.Evid. 702.

The
decision to permit or exclude expert testimony lies within
the discretion of the trial court, and is the standard set by
the United States Supreme Court in Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579 (1993). Under
Daubert, trial judges are given the
“responsibility of acting as gatekeepers to exclude
unreliable expert testimony[.]” Fed.R.Evid. 702,
Comment to 2000 Amendments. By acting in this
“gatekeeper” role, the court must find that all
submitted expert testimony be properly grounded,
well-reasoned, and not mere speculation before it can be
admitted to trial. See Daubert, 509 U.S. at 592
(finding that an expert's knowledge must be more than
mere “subjective belief or unsupported
speculation”). The Court stated that the party offering
expert testimony must establish that the opinion is
“supported by appropriate validation … based on
what is known, ” but still acknowledged that it is
“unreasonable” to require the opinion be
“known to a certainty.” Id. at 590.

Despite
the court's wide discretion in determining an
expert's admissibility under Daubert-in the case
of factual ambiguity-the expert is less likely to be excluded
if the question of reliability would be better challenged on
cross-examination. See, e.g., id. at 595
(finding that “vigorous cross-examination [and]
presentation of contrary evidence . . . are the traditional
and appropriate means of attacking shaky but admissible
evidence.”). In other words, a challenge under
Daubert does not often result in the exclusion of
experts because of factual flaws made in their opinion when
their testimony would be probative to the jury and the issues
in dispute can otherwise and expectedly be uncovered during
trial. Id.

For the
following reasons, the court finds that Black Hills has
fulfilled its burden to proffer evidence regarding the
admissibility of Brown's expert testimony through
evidence that is sufficient to meet the standard set by Rule
702 and Daubert, and that MAC and Siouxland's
objections would be better addressed on cross-examination.

DISCUSSION

Before
moving forward, it is important and efficient to broadly
address a few points that MAC and Siouxland have made
regarding Brown. First, neither defendant objects to
Brown's credentials or qualifications as an Accredited
Senior Appraiser. Docket 85 at 5. Second, MAC and
Siouxland's main objections to Brown's reliability as
an expert stem from the allegations that his opinions
“drastically overstated” Black Hills' lost
profits by using numerically inaccurate data. Id. at
12.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While
the defendants urge the court to exclude Brown&#39;s
testimony due to the alleged inaccuracy of the numbers and
data used in calculating damages, the correctness of these
figures is a question of fact, not law. Further, Brown
specifically stated reasons for his estimations, so defense
can challenge these deliberate choices on cross-examination.
See Docket 93-5 at 10 (where Brown explained his
‘overestimations' by stating that “[Black
Hills'] historical sales of MAC trailers under represent
the strong traction [Black Hills] had achieved with MAC
customers.”) Most challenges made by MAC and Siouxland
intertwine Brown's methodology with the data applied to
his method, so this order will attempt, with all due
diligence, to separate the two so as only to comment on the
reliability of the formula and methodology used, and not the
conclusions ...

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